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Why is the Weebit Nano (ASX:WBT) share price dropping 7% today?

Weebit Nano (ASX: WBT) share price has retreated 7.2% today, paring back gains of more than 30% in one month. Let’s take a look.
The post Why is the Weebit Nano (ASX:WBT) share price dropping 7% today? appeared first on Motley Fool Australia. –

Computer memory designer Weebit Nano Ltd (ASX: WBT) share price has retreated 7.27% today, paring back gains of more than 30% in November. Investors have bought Weebit Nano shares this month amid optimism around the company’s potential commercialisation of memory technology next year.

At the time of writing, the Weebit Nano share price has dropped lower to $1.85. 

Weebit Nano’s recent capital raising

Weebit Nano has progressed efforts recently to take its latest memory chip technology to market. 

On 20 November, the company announced it had raised $12 million for commercialisation and to accelerate research and development of its ReRAM technology. The money will be used to strengthen its sales team and increase marketing activities ahead of the product launch mid-next year.

That $12 million was priced at $1.70 a share, and is part of an overall $15 million capital raise. The placement was made to new and existing sophisticated and institutional investors, and did not require shareholder approval.

Meanwhile, the remaining $3 million targeted under the capital raise will come via a share purchase plan (SPP) in December. An SPP is a form of capital raising by a listed company that offers shareholders the opportunity to apply for new additional shares. Australian regulations currently limit the maximum application per shareholder under an SPP to $30,000.

Only last week, Weebit Nano also reported the expansion of its strategic agreement with French research institute CEA-Leti. The company says the expanded deal will strengthen its competitive advantage, and enables it to upgrade the applications of the ReRAM technology into a wider range of future products.

More about the company

Weebit Nano is an Israeli company founded in 2015, and trading on the ASX since 2016. It focuses on addressing the growing need for new and advanced memory chips. 

Weebit claims that its ReRAM product is cheaper, faster, and more energy efficient than the existing Flash technology. The company touts ReRam as an emerging memory technology that combines the advantages of both RAM and Flash, and believes its commercial usage will increase dramatically over the next few years.

In its first-quarter update for FY21, Weebit said that its ReRAM technology was on track to transfer to the semiconductor fabrication plant. This brings it a step closer to commercialisation.

About the Weebit Nano share price in 2020

The Weebit Nano share price has surged more than 350% as the market sees its product nearing commercialisation. It has a 52-week high of $2.47, and currently commands a market cap of $212 million.

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Motley Fool contributor Eddy Sunarto has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post Why is the Weebit Nano (ASX:WBT) share price dropping 7% today? appeared first on Motley Fool Australia.

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